The Indian rupee rose 3 paise to close at 70.91 against the US dollar on Wednesday amid lack of triggers and geopolitical uncertainties. Easing crude oil prices propped up the local unit, though fresh capital outflows capped the gains, forex traders said.
Trading in emerging market currencies was subdued after British Prime Minister Boris Johnson lost the crucial Brexit Bill timetable vote. Besides, markets are also awaiting fresh cues on the potential US-China trade deal, they added. At the interbank foreign exchange, the rupee opened lower at 71.01 then fell to 71.03 against the greenback. The domestic unit finally settled for the day at 70.91, higher by just 3 paise over its last close.
"Due to mixed global cues, investors are seen on the sidelines. Lack of fresh triggers is causing the rupee to trade in a range 70.80-71.05 in the last couple of days," said Rahul Gupta, Head of Currency, Emkay Global Financial Services.
Unless we do not get clarity over the global geopolitical issues like the US-China trade deal or Brexit, we will not see much participation in the market, he added. According to Gaurang Somaiyaa, Forex and Bullion Analyst, Motilal Oswal Financial Services, "rupee failed to move out of the range of 70.70 and 71.30 (spot) following lack of cues on the domestic front. In the next couple of sessions, the rupee is expected to take cues more from the global factors than domestic factors and primarily from fresh updates on the Brexit front." Brent crude futures, the global oil benchmark, fell 0.77% to USD 59.24 per barrel. Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs.213.23 crore on Wednesday, as per provisional data. The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.03% to 97.55. The 10-year government bond yield was at 6.51%.